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RMG powers up NZ business

By Phil Boeyen, ShareChat Business News Editor

Tuesday 5th December 2000

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New Zealand's biggest power companies have signed an agreement with credit and receivables company RMG (NZSE: RMG) to provide internet credit reporting services.

RMG will provide the new facility through its wholly owned subsidiary CreditNet International, which will partner with Auckland database intelligence company Atlantis Marketing. RMG has a 25% stake in Atlantis.

Companies covered by the agreement account for 75% of all New Zealand's power customers, and discussions with remaining suppliers are at an advanced stage.

CreditNet spokesman, Nigel Hamilton, says power companies have large customer bases, with 250,000 customers switching power suppliers each year.

"Managing the exit and entry of hundreds of thousands of customers a year is a challenge for all large utilities, and one where considerable efficiencies can be gained through the use of modern e-business tools."

RMG chief executive Paul Cooney says the initiative has the potential to make a 10-15% reduction in the level of bad debt write-offs the power industry incurs each year, saving the industry millions of dollars.

"Our ability to operate an internet enabled, e-Services option to assist in the decision making will make a significant difference in power suppliers' ability to manage their customer relationships."

Mr Cooney says the agreement had been reached after months of intense competition, following a decision by power suppliers to act as one group and work with one credit information supplier. He says details of the arrangement are confidential but had "potentially significant revenue implications" for RMG.

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